Following yesterday’s losses, it was a bit of a do-nothing open for the European indices, though there was notable movement from sterling.
Extending what has turned into quite a nasty run for GBP/USD, the pound fell a further 0.4% against the dollar on Friday morning. That leaves it at $1.3865 for the first time in close to 7 weeks.
Against the euro the pound didn’t fare much better, falling 0.3%. However, the currency’s stronger long-term performance against its rival meant that it has simply pulled back from yesterday’s 2-and-a-half-month peak.
Blame appears to lie at the feet of the latest retail sales reading out of the UK. Analysts were always expecting a slowdown from April’s 9.2% increase. Yet instead of a 1.5% rise, May saw a 1.4% contraction.
Oddly, the reason behind the decline isn’t that alarming – with lockdown easing, more people were spending money in restaurants, rather than buying food in supermarkets or online. It follows, then, that food stores were the biggest drag on the overall number in May, with sales contracting by 5.7%.
The pound’s retreat failed to fully safeguard the FTSE, which itself fell 0.2%, dropping under 7,140. Elsewhere the CAC was down 0.1%, while the CAC was flat at a devilish 6,666.
As for the Dow Jones, following its latest round of losses on Thursday, coming in the aftermath of a hawkish(ish) Fed, the index is looking ahead to a flat start, leaving it at 33,830.
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